BRAZIL – Boeing and Embraer have secured unconditional approval from the Administrative Council for Economic Defense’s (CADE) General-Superintendence (SG) in Brazil for their strategic partnership.
Under this partnership, the two companies have planned to embark on two joint ventures, namely Boeing Embraer-Defense and Boeing Brasil-Commercial.
The Boeing Embraer-Defense joint venture will focus on developing new markets for the C-390 Millennium multi-mission airlift and air mobility aircraft.
Embraer will own 51% controlling stake in the JV with US aircraft manufacturer will be the custodian of the remaining 49%.
The Boeing Brasil–Commercial will cover the commercial aviation operations of Embraer and will be controlled by Boeing who will have an 80% interest in the venture while Embraer will hold the remaining 20%.
Unless requested by CADE commissioners for evaluation, the resolution will be final in the next 15 days.
Boeing’s Embraer Partnership & Group Operations president Marc Allen said: “This latest clearance is yet another endorsement of our partnership, which will bring greater competition to the regional jet marketplace, better value for our customers and opportunities for our employees.”
So far, the partnership has already secured unconditional approvals from various regulatory jurisdictions, including Brazil, the US, China, Japan, South Africa, Montenegro, Colombia and Kenya.
The deal is yet receive a go ahead from the European Commission, which currently is reviewing the proposal.
The two companies will now have to wait until April 30 to know the verdict of the European Union.
Since late 2018, Boeing and Embraer have been constantly following-up with the European Commission regarding the transaction.
Allen added: “Given the positive endorsement we’ve seen from customers across Europe and the unconditional clearance we’ve received from every other regulator who has considered the transaction, we look forward to securing final approval for the transaction as soon as possible.”
Boeing has offered to pay $4.2 billion for 80% of Embraer’s commercial jet division, which builds passenger jets in the 70- to 150-seat segment.
The acquisition of a controlling stake in Embraer’s commercial jet division by Boeing puts it in direct competition with next-generation jets designed by Bombardier Inc and acquired by Europe’s Airbus SE, which rebranded them to the A220 program.